Opposition Seeks Assurances from BOJ following FX Market Developments

The Opposition People’s National Party is calling on the Central Bank to assure the nation that the recent developments with the Jamaican dollar will not disrupt the foreign exchange market.

The Opposition was reacting to the Bank of Jamaica, BOJ’s disclosure that it has pumped USD$20-million into the foreign exchange market in a flash auction.

The Opposition says the move was to address a severe shortage of foreign exchange in the local foreign exchange market.

In a statement on Friday, Opposition Spokesman on Finance, Mark Golding, says there has been reports of a severe shortage of foreign exchange in the local foreign exchange market. He says this was confirmed by Thursday’s flash auction.

Mr Golding says the published report on the auction states that BOJ received 44 eligible bids seeking to buy a total of over USD$50-million, which has left 27 bids and over USD$30-million unsatisfied. He says Jamaica experienced a period of what he calls a ‘similar rapid currency devaluation’ in 2018. He says that coincided with the announcement that the annual inflation rate had breached the BOJ’s target. He says these exchange rate movements create a more challenging environment for businesses. He’s calling on the government to explain why the foreign exchange market has been experiencing what he says is a ‘major supply shortfall’ in the height of the tourist season.

The Opposition is also calling on the BOJ to explain whether repeating exchange rate volatility is what Jamaica can expect from what it says is the new policy of “inflation targeting”.

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